YDI Wireless Achieves Record Revenues and Return to Profitability in Third Quarter 2003
Contact: David L. Renauld
(Vice President, Corporate Affairs)
Phone: 413-665-8551
Falls Church, Virginia — October 21, 2003: YDI Wireless, Inc. (OTCBB:YDIW - News), a leading developer and supplier of broadband wireless solutions, today reported its financial results for the third quarter ended September 30, 2003.
Revenue for the quarter ended September 30, 2003 was $8.0 million, an increase of 11% over the revenue of $7.2 million for the quarter ended June 30, 2003 and an increase of 56% over the revenue of $5.1 million for the quarter ended September 30, 2002.
The net income for the third quarter of 2003 was $628 thousand or $0.04 per share, diluted, compared to net income of $3.6 million or $0.43 per share, diluted, for the second quarter of 2003 and net loss of $4,000 or $0.00 per share, diluted, for the third quarter of 2002. The net income for the second quarter 2003 resulted from the immediate recognition of the negative goodwill from the Young Design-Telaxis transaction. This recognition resulted in a one-time gain of $4.7 million.
"We are extremely delighted to have returned to profitable operations with significant improvements to our balance sheet," states Robert E. Fitzgerald, Chief Executive Officer, who adds, "We knew that we would be returning to profitable operations at some point after digesting the Telaxis acquisition but did not expect that it would happen this rapidly. Profitability is the result of a fantastic team effort by everyone at YDI that has generated strong top line growth while maintaining a focus on margin improvement and cost containment. Going forward we don't expect our fourth quarter revenues and gross margin to be as high as they were in the third quarter due to some large orders shipped in Q3, component shortages in Q4, and typically weak sales in the last half of December. However, our focus will continue to be revenue growth and ongoing profitability. We believe our excellent third quarter results reflect an increasing recognition of our company and the breadth and quality of our product line, and we believe this recognition will enhance our prospects going forward."
YDI Wireless, Inc. is a world leader in providing extended range, license free wireless data equipment and is the result of the recent combination of Young Design and Telaxis Communications. This combination brought together Young Design's license-free products that extend the range of IEEE 802.11 wireless local area network systems, point-to-point wireless backhaul products, diverse and broad customer base, and deep market and industry experience with Telaxis' high-frequency millimeter-wave expertise and FiberLeap(TM) and EtherLeap(TM) products. In addition, YDI Wireless is a leading designer of turn-key long distance wireless systems ranging from 19.9 kbps to 1 Gbps for applications such as wireless Internet, wireless video, wireless LANs, wireless WANs, wireless MANs and wireless virtual private networks. Additional information about YDI Wireless as well as its complete product line can be found at the company's web site located at www.ydi.com or by contacting the company by telephone at 413-665-8551 or by email at IR@ydi.com.
Statements in this press release that are not statements of historical facts are forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from the results anticipated in these forward-looking statements due to risks arising from and relating to the recent combination of Telaxis Communications and Young Design and our ability to achieve the contemplated benefits of that combination; the downturn and ongoing uncertainty in the telecommunications industry and larger economy; the intense competition in our industry and resulting impacts on our pricing, gross margins, and general financial performance; and the other factors discussed in our filings made from time to time with the Securities and Exchange Commission and in our other public statements.
YDI WIRELESS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
YDI Wireless, Young Design,
Inc. and Inc. and
Subsidiaries Subsidiaries
(Consolidated) (Consolidated)
September 30, December 31,
2003 2002
(unaudited)
Assets
Current assets:
Cash and cash equivalents $6,269 $939
Restricted cash 141 -
Marketable securities 1,110 -
Accounts receivable, net 2,420 1,686
Refundable income taxes 275 -
Other receivables 166 -
Inventory 2,869 2,386
Investment securities - trading 130 4
Deferred tax asset - 142
Deposit - 1
Prepaid expenses 173 451
Total current assets 13,553 5,609
Property and equipment, net 2,696 1,823
Other Assets:
Investment in unconsolidated
subsidiaries - 36
Investment securities - available-
for-sale 1,304 841
Intangible assets, net 492 9
Deferred tax asset - 245
Deposits 49 9
Other assets - -
Total other assets 1,845 1,140
Total assets $18,094 $8,572
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $3,411 $2,158
Current maturities of notes payable 249 495
Current deposit - non-refundable - 9
Total current liabilities 3,660 2,662
Notes payable, net of current
maturities 1,333 1,402
Total liabilities 4,993 4,064
Commitments and contingencies - -
Stockholders' Equity
Preferred stock, $0.01 par value;
authorized 4,500,000, none issued at
September 30, 2003; none authorized,
none issued at December 31, 2002 - -
Common stock, $0.01 par value,
authorized 100,000,000, issued
13,592,845 at September 30, 2003;
$0.01 par value, 30,000,000 shares
authorized, issued 3,750,000 at
December 31, 2002 135 2
Additional paid-in capital 4,095 449
Retained earnings 8,375 4,066
Accumulated other comprehensive income:
Net unrealized gain/(loss) on
available-for-sale securities 496 (9)
Total stockholders' equity 13,101 4,508
Total liabilities and
stockholders' equity $18,094 $8,572
YDI WIRELESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
(Unaudited)
YDI Wireless, Young Design,
Inc. and Inc. and
Subsidiaries Subsidiaries
(Consolidated) (Consolidated)
For the Three Months
Ended September 30,
2003 2002
Revenues $8,029 $5,139
Cost of goods sold 3,741 3,219
Gross profit 4,288 1,920
Operating expenses:
Selling costs 698 482
General and administrative 1,841 928
Research and development 706 277
Total operating expenses 3,245 1,687
Operating income (loss) 1,043 233
Other income (expenses):
Interest income 81 1
Interest expense (32) (39)
Other income (expenses) (54) (8)
Excess of acquired net assets over cost -
Total other income (expenses) (5) (46)
Income before income taxes 1,038 187
Provision for income taxes 410 191
Net income (loss) $628 $(4)
Weighted average shares - basic 13,575,775 3,750,000
EPS, basic $0.05 $0.00
Weighted average shares - diluted 14,073,642 3,750,000
EPS, diluted $0.04 $0.00
YDI Wireless, Young Design,
Inc. and Inc. and
Subsidiaries Subsidiaries
(Consolidated) (Consolidated)
For the Nine Months
Ended September 30,
2003 2002
Revenues $21,694 $15,019
Cost of goods sold 13,140 9,682
Gross profit 8,554 5,337
Operating expenses:
Selling costs 1,701 1,056
General and administrative 5,781 3,019
Research and development 1,280 472
Total operating expenses 8,762 4,547
Operating income (loss) (208) 790
Other income (expenses):
Interest income 112 17
Interest expense (94) (100)
Other income (expenses) (3) (5)
Excess of acquired net assets over cost 4,775 -
Total other income (expenses) 4,790 (88)
Income before income taxes 4,582 702
Provision for income taxes 233 191
Net income (loss) $4,349 $511
Weighted average shares - basic 10,458,683 3,750,000
EPS, basic $0.42 $0.14
Weighted average shares - diluted 10,582,487 3,750,000
EPS, diluted $0.41 $0.14
Contact:
YDI Wireless, Inc.
David L. Renauld, 413-665-8551